Yen Skyrockets on Suspected Japanese Intervention

The Japanese yen surged after suspected intervention by Japanese authorities, sending shockwaves through FX markets.

The US dollar fell across the board yesterday, with the dollar/yen tumbling as much as 3.3%, a move so rapid and large it looked like an intervention episode. Reports later in the day corroborated suspicions, noting that the government had stepped into the FX market to buy yen and sell dollars.

The Bank of Japan kept interest rates steady yesterday but signaled further hikes ahead, with one member voting for a rate hike at this gathering. Despite the hawkish tone, investors may have considered the intervention-related rally in the yen as a renewed selling opportunity.